Companies are routinely viewed as potential major donors by nonprofits. In the past few years, many nonprofits – large and small – have hired corporate-focused business development officers, tasked with landing major gifts from companies. The problem is, though, that companies don’t actually have deep pockets for nonprofits. Yes, they might have large contributions budgets, but that doesn’t mean much.
There are several reasons for this, of course. One reason is the company’s need to diversify funds across a spectrum of community needs and communities. Another is that many grants are on an entitlement/rubberstamp system that started years ago and has yet to be pulled off the table. Thirdly, company leaders often dictate provide strong guidance on where funds should be used, which can significantly impact the contribution team’s financial capabilities.
A typical Fortune-ranked company, with a foundation, will receive 5,000 – 8,000 grant requests per year, and end up funding between 10% – 50% of those requests. It is quite literally impossible for a single company to fulfill all of these requests for funds. But what if a company receives a grant request, desires to help, but has no more money to do so? Well, where there’s a will, there’s a way.
After determining that the company really wants to be aligned with the nonprofit’s program, and realizing that there is no more money, the company can do one or several of the following:
1) Employee volunteerism
This is a common solution, as it enables employee engagement, and allows for corporate bragging rights. There are really two ways to conduct employee volunteerism: 1) targeted placements, or 2) en masse day of caring.
As I’ve written before, I’m a fan of the targeted placements. It helps specific employees achieve goals that should assist the company in the future, while potentially greatly assisting the nonprofit in ways it might not have been helped otherwise. The company won’t get as much community publicity, but it will achieve the goal of partnering with the nonprofit.
Employee volunteer days generate publicity, but are disruptive and often don’t achieve desired results. (Although, maybe someday I’ll write in favor of this model with the many examples of success that I am aware of.)
2) In-kind contributions
For every product “given away,” there’s a product not being sold. Which, in developing economies at least, means that there’s a shop keeper who didn’t make a sale, didn’t earn an income, and comes a step closer to closing down.
In-kind contributions are fantastic when the product is rare, expensive and is easily used by the nonprofit across successive turnover. They are also fantastic when it’s raw materials, gifted to nonprofits that can turn dirt into gold, resulting in the nonprofit’s targeted audience developing skills, income, and all the benefits of being quasi-employed.
3) Sales and marketing budget
Did you know that many companies have deep sales and marketing budgets? No? Seriously, where have you been? If the nonprofit can prove the real business case for the company, and convince it to use a sales and marketing budget, then the effort is worth it. Remember: the business case isn’t “because we’re a charity.” It’s because the use of corporate funds will result in corporate profit.
4) Leverage its influence over others
As great as nonprofits are about asking for money, employees, and stuff, they often fail to ask for leverage. A letter of endorsement, a CEO phone call, etc. can often be just as beneficial to the nonprofit as a $X check. Perhaps the nonprofit is asking one company for $5,000 and another company for $1M. If the first company’s CEO and the second company’s CEO know one another, wouldn’t it be great for CEO one to call CEO two and endorse the nonprofit? If company one has no more money, but it has influence, I’d pass on the effort necessary to retrieve $5,000 and ask for influence.
These types of contributions are often overlooked in reports, news articles, and development officer trainings, which is really too bad. The moral of all of this is to not let anything get in the way of developing a positive relationship in communities that are strategically important to the company.
This post first appeared on the blog 2851 Communities. See the original post here.
About the Author
Leith Robotham is a global corporate community engagement specialist, assisting companies large and small to improve corporate image, brand and reputation among multiple stakeholders. Currently, Leith directs the corporate services and engagement activities of Kordant Philanthropy Advisors. Previously, he established Caterpillar Foundation’s international grants program. Follow Leith on Twitter @global_donor